It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Kraken Robotics Inc (CVE:PNG), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Check out our latest analysis for Kraken Robotics
The Last 12 Months Of Insider Transactions At Kraken Robotics
In the last twelve months, the biggest single sale by an insider was when President Karl Kenny sold CA$450k worth of shares at a price of CA$0.30 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of CA$0.42. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. As a general rule we consider it to be discouraging when insiders are selling below the current price. Please note, however, that this single sale was just 5.4% of Karl Kenny’s stake. Karl Kenny was the only individual insider to sell over the last year.
You can see the insider transactions over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Kraken Robotics Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s good to see that Kraken Robotics insiders own 32% of the company, worth about CA$12m. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Kraken Robotics Insider Transactions Indicate?
An insider sold stock recently, but they haven’t been buying. Furthermore, transactions over the last twelve months dispel the notion that insiders won’t sell readily. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! Of course, the future is what matters most. So if you are interested in Kraken Robotics, you should check out this free report on analyst forecasts for the company.
But note: Kraken Robotics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.